Apparently everyone wants transparency in Tanzania’s gas contracts. Lets get them online

contract transparencyLast weekend, Statoil management finally broke their silence on their leaked contract for gas production in Tanzania. In an interview with The Citizen newspaper, Statoil’s Country Manager for Tanzania, Øystein Michelsen, spoke at length, including on the subject of contract transparency:

“Statoil respects the position of any government in the countries where we operate with regards to whether the contracts are made publicly available or not. In a number of countries where we operate the contracts are publicly available and Statoil does comply with that position. In Tanzania, the contracts are confidential and for that matter, Statoil also complies with that position.” [my emphasis]

“In 2012, Transparency ranked Statoil as the most transparent company among the world 105 largest publicly traded companies [see here]. We will continue to promote transparency, but we will also respect contract terms and the obligations we have towards our partners.”

The Citizen used this as their headline: “Investors accuse govt of keeping contracts secret.” And the point is clear: Statoil has no objection to contract transparency.

This appears to confirm what the IMF said (pdf) back in May:

“Transparency is critical, not the least for the public to gain confidence that any agreements
are fair. A good starting point would be to disclose the terms of signed PSAs. Companies are likely to welcome this, at least as long as disclosure is applied across all companies on a level playing field. More generally, the government needs to step up to the challenge of providing credible information that is accessible to the ordinary citizen.” [my emphasis]

And there are plenty more who have said these contracts should be transparent.

Policy Forum, and their civil society colleagues, called recently on the government to:

“Make public the signed (original) Statoil PSA of 2007 for public scrutiny, [and] make public all the signed (original) 25  PSAs and the new ones to be signed for fair treatment of all actors in the industry.”

Prof Ibrahim Lipumba, National Chairman of the Civic United Front (CUF), wrote a column in the (Tz) Guardian:

“The government should be transparent in its management of the natural resources. All contracts with big companies should be made available to the public.”

The Natural Resource Governance Institute (NRGI) (pdf) commented on transparency in their analysis of the leaked Statoil PSA:

“The debate illustrates the value to Tanzania of more systematic disclosure of its natural resource contracts. More systematic disclosure particularly on contracts, negotiation and bidding processes provides the government and extractive companies with an opportunity to show a firm commitment to transparency; put all projects on a level playing field; manage citizen expectations and guard against unrealistic assumptions about the nature of extraction projects; facilitate consistent public monitoring of implementation of project; and, ultimately, improve public trust and the stability of the operating environment for businesses.

And yet, there’s a contradiction here. The IMF, NRGI, Policy Forum et al, and Prof Lipumba all say contract transparency would be a good thing, and Statoil says the only reason they don’t publish contracts is that the government objects. But is there really any legal or policy obstacle to making these contracts public?

The first comment on The Citizen’s interview with the Statoil Country Manager came from Zitto Kabwe, taking issue with Michelsen’s claim that in Tanzania, contracts are confidential:

“According to which provision of the constitution? According to which provision of the petroleum act? According to which provision of the PSA?”

“This is a myth. It started with mining contracts. I served in Bomani Commission and we found out that no contract has a provision for confidentiality. I took 5 contracts ( Buzwagi, Bulyanhulu, Golden Pride, North Mara and Tulawaka), photocopied them and gave them to journalists at a press conference to kill this myth.”

“PSAs are not confidential. The minister has said so. And the PS has said so too. Why don’t they make them public? Just put on the ministry or TPDC website to demonstrate that you want transparency of contracts.”

(The Citizen’s sister paper, Mwananchi, even turned this comment into an article.)

Which is perhaps the point that the outgoing Managing Director, Mr Yona Kilagane, and Board Chair, Mr Michael Mwanda, of the Tanzania Petroleum Development Corporation (TPDC), were trying to make when they spoke to Daily News in July:

“Mr Kilagane and Mr Mwanda explained to ‘Daily News’ in separate interviews that such contracts are open for public scrutiny.

“’As a parliamentarian, Mr Zitto knows laid procedures for obtaining such documents. It is not proper to claim the PSA was leaked and yet in reality it can be obtained by anyone,’ Mr Mwanda told Daily News in a telephone interview.”

The IMF, NRGI, Policy Forum and Prof Lipumba say the contracts should be public. Statoil say they have no problem with that. TPDC says they are already public, and Zitto agrees.

It looks like nobody objects to contract transparency.

So where are they? Lets get them online.

– – – – –

UPDATE: 28/9/14

We can add Presidential aspirant, January Makamba, to the list of those supporting contract transparency:

UPDATE: 6/10/14

An article in The Citizen quoted an unnamed “official”, responding to the Statoil Country Manager’s comments:

“The government has never asked anyone or directed them to keep the contracts secret… We do not have any policy or law that binds them not to disclose contracts. They can do so if they wish.”

More notably still, the same article quotes the CCM Secretary General, Abdulrahman Kinana:

The ruling CCM has also challenged the investors to disclose their contracts if they want to do so. Secretary General Abdulrahman Kinana said doing so would help promote transparency in the management of natural resources and national wealth.

“If those who insisted on confidentiality in the contracts now want them to be public, I have no problem with that,” he added. “In fact, it will help promote transparency and let Tanzanians know how their resources are utilised.”

And finally, again from the same article:

Attorney General Frederick Werema says he has never come across a secret contract in his career, especially in public contracting where such deals are uncommon.

According to him, confidentiality has never been absolute and the terms and agreements of any contract can be disclosed with the consent of the parties involved.

Mr Werema challenged the investors accusing the government of secrecy to be the first to make their contracts public.

3 thoughts on “Apparently everyone wants transparency in Tanzania’s gas contracts. Lets get them online

  1. Abdallah Kileo

    As you can from the story,the Investors have no problems,the Goverment officials are the one who have problem.Here is where PCCB and TISS need to find out why these officials are suggesting the contracts not to be transparent,know to the public,in a very simple swahili language,Why?what is the motive behind?

  2. Marius Sigvald Eftestøl

    Hello. Nice article! I am a norwegian but born in Kenya with norewgian parents.

    I live now in Norway but soon moving to Zanzibar. It is sad that the norwegian people dont know much about statoils plans i Tanzania. I love the Swhaili coast and will try to get the norwegian media to talk more about what statoil is doing in africa.

    will follow you in the future!


  3. Pingback: Tanzania’s draft extractive industries laws say a lot about transparency. Highlights and initial thoughts | mtega

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